Devil's Waltz (45 page)

Before I could answer, he was up and headed for the kitchen. He returned with Milo, who was carrying three cups of coffee.

Taking one for himself, Milo put the remaining two on the coffee table and settled on the other end of the sofa. Our eyes met. He gave a small nod. Trace of apology.

Huenengarth sat back down, in a different chair from the one he’d just gotten out of. Neither he nor I touched our coffee.

Milo said, “Skoal,” and drank.

“Now what?” I said.

“Yeah,” said Milo. “He’s low on charm, but maybe he can do what he says he can.”

Huenengarth turned toward him and glared.

Milo sipped, crossed his legs.

I said, “You’re here of your own free will, huh?”

Milo said, “Well, everything’s relative.” To Huenengarth: “Stop playing Junior G-man and give the man some data.”

Huenengarth glared some more. Turned to me. Looked at his coffee cup. Touched his mustache.

“This theory you have,” he told me, “about Charles Jones and George Plumb destroying the hospital — who’ve you discussed it with so far?”

“It’s not
my
theory. The entire staff thinks the administration’s screwing the place over.”

“The entire staff hasn’t taken it as far as you have. Who’ve you talked to besides Louis B. Cestare?”

I hid my surprise and my fear. “Lou’s not involved in this.”

Huenengarth half-smiled. “Unfortunately, he is, Doctor. A man in his position, all those links to the financial world — he could have turned out to be a knotty problem for me. Fortunately, he’s being cooperative. At this very moment. Conferring with one of my colleagues up in Oregon. My colleague says Mr. Cestare’s estate is quite lovely.”

Full smile. “Don’t worry, Doctor, we only bring out the thumbscrews as a last resort.”

Milo put down his coffee. “Why don’t you just cut to the chase, bucko?”

Huenengarth’s smile vanished. He sat up straighter and looked at Milo.

Silent stare.

Milo gave a disgusted look and drank coffee.

Huenengarth waited a while before turning back to me. “Is there anyone else you’ve spoken to in addition to Mr. Cestare? Not counting your girlfriend, Ms. — uh — Castagna. Don’t worry, Doctor. From what I know about her, she isn’t likely to leak a story to
The Wall Street Journal
.”

“What the hell do you want?” I said.

“The names of anyone you’ve included in your fantasy. Specifically, people with business connections or a reason to harbor a grudge against Jones or Plumb.”

I glanced at Milo. He nodded, though he didn’t look happy.

“Just one other person,” I said. “A doctor who used to work at Western Peds. Now he lives in Florida. But I didn’t tell him anything he didn’t already know and we didn’t go into any details—”

“Dr. Lynch,” said Huenengarth.

I swore. “What’d you do, tap my phone?”

“No, that wasn’t necessary. Dr. Lynch and I talk once in a while. Have been talking for a while.”

“
He
tipped you off?”

“Let’s not get sidetracked, Dr. Delaware. The main thing is
you
told me about speaking to
him
. That’s good. Admirably frank. I also like the way you wrestled with it. Moral dilemmas mean something to you — I don’t get to see that too often. So now I trust you more than when I walked into this room, and that’s good for both of us.”

“Gee, I’m touched,” I said. “What’s my reward? Learning your real name?”

“Cooperation. Maybe we can be mutually helpful. To Cassie Jones.”

“How can you help her?”

He folded his arms across his barrel chest. “Your theory — the
entire staff’s
theory — is appealing. For a one-hour TV episode. Greedy capitalists sucking the lifeblood out of a beloved institution; the good guys come in and clean it up; cut to commercial.”

“Who’re the good guys here?”

He put a hand to his chest. “I’m hurt, Doctor.”

“What are you, FBI?”

“A different collection of letters — it wouldn’t mean anything to you. Let’s get back to your theory: appealing, but wrong. Do you remember Cestare’s first reaction when you floated it by him?”

“He said it was unlikely.”

“Why?”

“Because Chuck Jones was a builder, not a destroyer.”

“Ah.”

“But then he looked up
Plumb’s
job history and found out companies
he’s
been associated with tend not to live long. So maybe Jones has changed his style and is going for slash and burn.”

“Plumb
is
a slash-and-burn man,” he said. “Got a long history of setting up companies for raiders, then taking fat commissions on the buy-out. But those were companies backed up by
assets
that made them worth plundering. Where’s the incentive to destroy a nonprofit money-loser like Western Pediatrics? Where are the
assets
, Doctor?”

“The real estate the hospital sits on, for a start.”

“The real estate.” Another headshake, accompanied by a finger wag. The guy had a definite tutorial bent. “As a matter of fact, the land is owned by the city and leased to the hospital under a ninety-nine-year contract, the contract’s renewable for another ninety-nine at the hospital’s request, and the rent’s a dollar a year. Public record — look it up at the assessor’s office, just as I did.”

“You’re not here because Jones and his gang are innocents,” I said. “What are they after?”

He moved forward on his chair. “Think
convertible
assets, Doctor. A massive supply of high-quality stocks and bonds at Chuck Jones’s disposal.”

“The hospital’s investment portfolio — Jones manages it. What’s he doing, skimming?”

Yet another headshake. “Proximate but no panatela, Doctor. Though that’s also a reasonable assumption. As it turns out, the hospital’s portfolio is a joke. Thirty years of dipping into it to balance the operating budget has stripped it down to bare bones. In fact, Chuck Jones has built it up some — he’s a very savvy investor. But rising costs keep eating away at it. There’ll never be enough in there to make it worth fooling with — not at Jones’s level.”

“What’s his level?”

“Eight figures. Major-league financial manipulation. Fisk and Gould would have counted their fingers after shaking hands with Chuck Jones. His public image is that of a financial wizard and he’s even saved a few companies along the way. But it’s his
plundering
that fuels it all. The man’s destroyed more businesses than the Bolsheviks.”

“So he’s a slash-and-burn man, too, as long as the price is high enough.”

Huenengarth looked up at the ceiling.

“Why doesn’t anyone know about it?” I said.

He scooted forward a bit more. Very little of him was touching the chair.

“They will soon,” he said quietly. “I’ve been on his trail for four and a half years and the end’s finally in sight. No one’s going to fuck it up — that’s why I need total discretion. I
won’t
get derailed. Understand?”

The pink of his neck had deepened to tomato-aspic. He fingered his collar, loosened his tie and opened it.

“
He’s
discreet,” he said. “Covers himself beautifully. But I’m going to beat him at his own game.”

“Covers himself how?”

“Layers of shadow corporations and holding companies, phony syndicates, foreign bank accounts. Literally
hundreds
of trading accounts, operating simultaneously. Plus battalions of lackeys like Plumb and Roberts and Novak, most of whom only know a small part of each picture. It’s a screen so effective that even people like Mr. Cestare don’t see through it. But when he falls, he’s going to fall hard, Doctor, I promise you. He’s made mistakes and I’ve got him in my sights.”

“So what’s he plundering at Western Peds?”

“You really don’t need to know the details.”

He picked up his coffee cup and drank.

I thought back to my conversation with Lou.

Why would a syndicate buy it, then shut it down?

Could be any number of reasons… They wanted the company’s resources, rather than the company itself.

What kinds of resources?

Hardware, investments, the pension fund…

“The doctors’ pension fund,” I said. “Jones manages that, too, doesn’t he?”

He put down the cup. “The hospital charter says it’s his responsibility.”

“What’s he done with it? Turned it into his personal cashbox?”

He said nothing.

Milo said, “Shit.”

“Something like that,” said Huenengarth, frowning.

“The pension fund is eight figures?” I said.

“A healthy eight.”

“Come on, how’s that possible?”

“Some luck, some skill, but mostly just the passage of time, Doctor. Ever calculate what a thousand dollars left in a five percent savings account for seventy years would be worth? Try it some time. The doctors’ pension fund is seventy years’ worth of blue chip stocks and corporate bonds that have increased ten, twenty, fifty, hundreds of times over, split and resplit dozens of times, and paid out dividends that are reinvested in the fund. Since World War Two the stock market’s been on a steady upward swing. The fund’s full of gems like IBM purchased at two dollars a share, Xerox at one. And, unlike a commercial investment fund, almost nothing goes out. The rules of the fund say it can’t be used for hospital expenses, so the only outflow is payments to doctors who retire. And that’s only a trickle, because the rules also minimize payments to anyone who leaves before twenty-five years.”

“The actuarial structure,” I said, remembering what Al Macauley had said about not collecting any pension. “Anyone who leaves before a certain period gets paid nothing.”

He gave an enthusiastic nod. The student was finally getting things right.

“It’s called the fractional rule, Doctor. Most pension funds are set up that way — supposedly to reward loyalty. When the medical school agreed to contribute to the fund seventy years ago, it stipulated that a doctor who left before five years wouldn’t get a penny. Same goes for one who leaves after
any
time period and continues to work as a physician at a comparable salary. Doctors are very employable, so those two groups account for over eighty-nine percent of cases. Of the remaining eleven percent, very few doctors serve out the full twenty-five and qualify for full pension. But the money paid into the fund for every doctor who’s ever worked at the hospital stays right there, earning interest.”

“Who contributes besides the med school?”

“You were on staff there. Didn’t you read your benefits package?”

“Psychologists weren’t included in the fund.”

“Yes, you’re right. It does stipulate M.D…. Well, count yourself lucky to be a Ph.D.”

“Who contributes?” I repeated.

“The hospital kicks in the rest.”

“The doctors don’t pay anything?”

“Not a penny. That’s why they accepted such strict regulations. But it was very shortsighted. For most of them, the pension’s worthless.”

“Stacked deck,” I said. “Giving Jones an eight-figure cashbox — that’s why he’s making the staff’s lives miserable. He doesn’t want to destroy the hospital — he wants to keep it limping along with no doctor staying very long. Keep turnover high — staff leaving before five years or when they’re young enough to get comparable jobs. The pension keeps accruing dividends, he doesn’t have to pay out, and he’s able to rape the surplus.”

He nodded with passion. “Gang rape, Doctor. It’s happening all over the country. There are over nine hundred thousand corporate pension funds in the U.S. Two
trillion
dollars held in trust for eighty million workers. When this last bull market created billions of dollars of surplus, corporations got Congress to ease up on how surpluses can be used. The money’s now considered a
company
asset, rather than the property of the workers. Last year alone, the sixty largest corporations in the U.S. had sixty billion dollars to play around with. Some companies have started buying insurance policies so they can use the
principal
. It’s part of what fueled the whole takeover mania — pension status is one of the first things raiders look at when they choose their targets. They dissolve the company, use the surplus to buy the next company, and dissolve
it
. And so on and so on. People get thrown out of jobs — too bad.”

“Getting rich with other people’s money.”

“Without having to create any goods or services. Plus, once you start thinking you own something, it gets easier to bend the rules. Illegal pension manipulations have skyrocketed — embezzlement, taking personal loans out of the fund, awarding management contracts to cronies and taking kickbacks while the cronies charge outrageous management fees — that’s organized crime’s contribution. Up in Alaska we had a situation where the mob cleaned out a union fund and workers lost every cent. Companies have also changed the rules in the middle of the game by switching over to defined-contribution plans. Instead of monthly payments the retiree gets one lump sum based on his life expectancy, and the company buys itself predictability. It’s legal, for the time being, but it defeats the whole purpose of pensions — old-age security for working people. Your average blue-collar guy doesn’t have any idea how to invest. Only five percent ever do. Most defined-benefit payouts get frittered away on miscellaneous expenses, and the worker’s left high and dry.”

“Surpluses,” I said. “Bull markets. What happens when the economy slows, like right now?”

“If the company goes belly-up and the plan’s been looted, the workers have to collect from any private insurance companies that hold paper. There’s also a federal fund — PBGC. Pension Benefits Guarantee Corporation. But just like FDIC and FSLIC, it’s grossly underfunded. If enough companies with looted plans start folding, you’ll have a crisis that’ll make the S and L thing look like a picnic. But even with PBGC functioning, it can take years for a worker to collect on a claim. The employees with the most to lose are the oldest and sickest — the loyal ones who gave their lives to the company. People go on welfare, waiting. Die.”

His whole face had gone red and his hands were big mottled fists.